Correlation Between Koninklijke Philips and Paragon 28
Can any of the company-specific risk be diversified away by investing in both Koninklijke Philips and Paragon 28 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Koninklijke Philips and Paragon 28 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Philips NV and Paragon 28, you can compare the effects of market volatilities on Koninklijke Philips and Paragon 28 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Koninklijke Philips with a short position of Paragon 28. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Philips and Paragon 28.
Diversification Opportunities for Koninklijke Philips and Paragon 28
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Koninklijke and Paragon is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Philips NV and Paragon 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paragon 28 and Koninklijke Philips is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Koninklijke Philips NV are associated (or correlated) with Paragon 28. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paragon 28 has no effect on the direction of Koninklijke Philips i.e., Koninklijke Philips and Paragon 28 go up and down completely randomly.
Pair Corralation between Koninklijke Philips and Paragon 28
Considering the 90-day investment horizon Koninklijke Philips NV is expected to generate 0.51 times more return on investment than Paragon 28. However, Koninklijke Philips NV is 1.97 times less risky than Paragon 28. It trades about 0.05 of its potential returns per unit of risk. Paragon 28 is currently generating about -0.01 per unit of risk. If you would invest 1,868 in Koninklijke Philips NV on August 27, 2024 and sell it today you would earn a total of 771.00 from holding Koninklijke Philips NV or generate 41.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Philips NV vs. Paragon 28
Performance |
| Timeline |
| Koninklijke Philips |
| Paragon 28 |
Koninklijke Philips and Paragon 28 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Philips and Paragon 28
The main advantage of trading using opposite Koninklijke Philips and Paragon 28 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Philips position performs unexpectedly, Paragon 28 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Paragon 28 will offset losses from the drop in Paragon 28's long position.| Koninklijke Philips vs. Heartbeam | Koninklijke Philips vs. EUDA Health Holdings | Koninklijke Philips vs. Nutex Health | Koninklijke Philips vs. Healthcare Triangle |
| Paragon 28 vs. Heartbeam | Paragon 28 vs. EUDA Health Holdings | Paragon 28 vs. Nutex Health | Paragon 28 vs. Healthcare Triangle |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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